Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


CORRECT: A2 first-half profit dented by UK joint venture

CORRECT: A2 first-half profit dented by UK joint venture, affirms annual earnings target of $11.2M

(Fixes incorrect net profit figures in 2nd graph. Updates share price in lead and 8th graph)

By Paul McBeth

Feb. 27 (BusinessDesk) - A2 Corp, which markets milk products with a protein variant claimed to have health benefits, reported an 82 percent slide in first-half profit as the cost of setting up its UK joint venture eroded the bottom line. The shares gained 1.9 percent as it affirmed its annual earnings forecast.

Net profit dropped to $554,000, or 0.09 cents per share, in the six months ended Dec. 31 from $3.1 million, or 0.53 cents, a year earlier, the Sydney-based company said in a statement. That came from a $1.5 million loss on establishing its UK joint venture with Robert Wiseman Dairies, which only started selling product in October last year.

"Our first priority (for the UK venture) is to build our rate of sales - we need to justify our shelf space," managing director Geoff Babidge told BusinessDesk. "Then we need to have a plan to achieve breakeven."

Earnings before interest, tax, depreciation and amortisation jumped 54 percent to $3.5 million, on a 57 percent gain in sales to $44.3 million. The company affirmed ebitda guidance of $11.2 million before intercompany charges from its Australasian businesses.

The company more than doubled its Australian segment profit to $3.8 million in the period, and now makes up some 6.9 percent of supermarket sales of fresh milk by value and is targeting 10 percent.

"We're continuing to be very strong in moving toward that number, and I am confident we should exceed it," Babidge said.

A2 is still looking at options to develop the brand in New Zealand in conjunction with the existing licensee, it said.

The shares rose 1 cent to 53 cents, and have climbed 70 percent in the past 12 months. The board didn't declare an interim dividend.

In December, A2's three cornerstone shareholders - ASX-listed Freedom Foods Group, Mountain Road Investments, associated with chairman Cliff Cook and Equity Group Investments sold down their stakes as part of a $20 million capital raising and shift to the NZX main board.

Babidge said A2's sales of infant formula into China are expected to kick off in June, and it is still looking at other potential opportunities, such as entering North America, Europe, or expanding its range to include ultra-heat treated products.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news